Fed Now Expects Three Rate Hikes In 2017, Sees 1.8% Longer-Run GDP Growth

Jon Alternative Media, Blogosphere, Economy, Fiscal Policies

While the 25 bps rate hike was a given, the question on everyone’s mind was how many rate hikes does the Fed envision for 2017. The answer, somewhat surprisingly, is three, an increase of one compared to the September meeting.
This is median assessment of appropriate pace of policy according to the dots:
2016 0.625% (range 0.625% to 0.625%); prior 0.625% 2017 1.375% (range 0.875% to 2.125%); prior 1.125% 2018 2.125% (range 0.875% to 3.375%); prior 1.875% 2019 2.875% (range 0.875% to 3.875%); prior 2.625% For the longer run, the Fed now expects a 3% Fed Funds rate, (range 2.500% to 3.750%); up from the prior 2.875%.
A comparison of the dot plots:

This post was published at Zero Hedge on Dec 14, 2016.